Good morning, ladies and gentlemen, and welcome to the conference call on EVM's results for the Q1 of the 2020 2021 Financial Year. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Mr. Stefan Syskowitz.
Good morning, and welcome to the conference on EVN's results for the Q1 of the 2020, 2021 financial year. We started this financial year with a sound performance. EBITDA, EBIT and group net result are above the previous year. The main drivers for these developments were the earnings contribution, Corporate Equity, Accountant Industries, in particular our supply company, Iveen Kaki and developments in our environment segment, in particular the start of the COVID project. The COVID-nineteen pandemic remains a permanent factor in our daily working environment.
We need to constantly ensure the protection of our employees, customers and business partners, especially activities and projects which require personal interaction, traveling And international supply chains remain challenging. However, from a financial point of view, the corona crisis only had a selective negative impact on our operating results. Our integrated business model and a widely diversified customer base continue to be stabilizing factors. As communicated last year, the corona crisis shall not impact our investment program. On the contrary, we are committed to further increase CapEx.
Our plan is to invest on average up to €450,000,000 during the next couple of years. Therefore, Up to 3 fourth will be directed towards regulated and stable activities in Lower Austria. During Q1, We were able to increase investments by 13.9 percent to €86,800,000 The key investment focus now and in future It's on network infrastructure. These investments fulfill 3 strategic objectives. They secure supply security, Enable carbon free energy future and provide for further growth to our regulated business.
Further Investment areas are renewable generation, biomass and drinking water. I would now like to explain our recent progress in these areas. End of December, we started operations of a new wind farm with an installed capacity of 8.4 megawatt. This increased our installed wind capacity to 3.76 Megawatt. In Krems, which is the 5th largest town in Lower Austria, we will construct a new biomass cogeneration plant.
The investment volume is about €30,000,000 On commissioning, which is planned for early 2023, this plant will supply renewable electricity to approximately 15,000 households and natural heat to 30,000 households. In the International Project Business, we were awarded new contract in Poland. As general contractor, we will be responsible for the modernization of a wastewater treatment plant. The contract value is €11,400,000 Let me now continue with the key financials for the Q1. The group's revenue was up by 4.8% year on year.
The main reason for this development is the start of the wastewater project in Kuwait. In addition, temperatures were colder than last year, which led to slightly higher network sales in all three core markets. Contrary factors were lower effect from the valuation of hedges for electricity generation And a decline in revenue from natural gas trading. I would like to inform you that our Q1 results include certain one off effects. These result from the effect that we took over an additional electricity procurement guide from the Wassington power plant In December 2020, in order to simplify the current contractual relationships, which this power plant is against the backdrop of the German law, which requires the termination of coal fired generation.
Our quarterly report contains a detailed description of the accounting effect. In a nutshell, I can say that in Q1 positive one off effect in EBITDA, which is contrasted by an impairment loss, Yes. The main reason for the rise in EBITDA were higher earnings contribution from Adequity Accounted Investies. Based on these three on these developments, the group's EBIT was up 14.4% and amounted to €135,900,000 Financial results were up by 25.9 percent. In total, we generated a group net result of €93,500,000 which represents an increase by 12.7% over the prior year.
Now I would like to move to the next slide, which provides some information regarding the group's balance sheet structure. Vivien's net debt has remained constant at approximately EUR 1,000,000,000. Yearn ratio was down and amounted to 19.3%. Our financial flexibility is solid. We benefit from lower net debt and sufficient committed undrawn credit facilities, which amounts to €571,000,000 as of the end of December 2020.
Our strong balance sheet structure forms the basis For pursuing organic growth opportunities in our regulated and stable Austrian activities. Before I will go through each of these segments in detail, I would like to give you a general overview on the EBITDA development of our business segments. The overview of the EBITDA development per segment illustrates Key drivers of our performance during the reporting period. Whereas the networks in the Southeast Europe segment are slightly above the previous year, The 3 other segments show more substantial improvement. These are due to the sound performance of our supply company, Efrain Cagay, The nonrecurring effects related to the takeover of the additional procurement rights from ISM-ten and the developments in the environment segment.
With this general overview, let's move on now to the next slide, which covers the generation segment in more detail. Electric generation volumes in this segment were down by 4.8% year on year. Renewable generation volumes were slightly above the previous year. Above average, good water flows offset the decline in wind flows. Thermal generation declined due to reduced use of the Valens Power Plant.
EBITDA was up at €56,800,000 This increase was mainly due to a positive one off effect related to the Balsam transaction, which I mentioned earlier. Scattered depreciation and amortization increased as a result of higher investments. In total, the Generation segment generated a higher EBIT of €35,700,000 On the next slide, I will continue with the Energy segment. The development of revenue in the Energy segment depends primarily on the marketing of the electricity generation in Evian's power plants. Therefore, due to a lower generation at device and power plant and a year on year decline in valuation effects from hedges, Revenue was down by 28.3%.
The Bison transaction also had a positive run off effect on the EBITDA in the Energy segment. These effects are contrasted by the impairment loss on a group level, which I mentioned before. Energy sales volume showed positive developments. Electricity, natural gas and heat sales volumes were above the prior year level. The increase in demand for natural gas and heat resulted from colder temperatures and the increase in electricity sales came from an expansion of the customer base.
The COVID-nineteen pandemic did not have any material negative effects on energy demand. The share of results from equity accountees and indices, which operational nature improved to €37,700,000 This increase was supported by a sound operating performance of Efrain, Caer And positive effect from the valuation of hedges. Based on these developments, the Energy segment reported an EBITDA of euros 53,600,000 and EBIT of €38,300,000 On the next slide, I will present the developments in our network segments. Networks sales volumes increased supported by a weather related increase in demand for electricity and natural gas In the Household Customer segment, this was contrasted by a slight decline in electricity consumption by commercial customers. There were no material effects on network sales volumes of the COVID-nineteen pandemic.
Based on these volume developments and the tariff Decision as of January 2020, which provided for reduction of network tariffs on natural gas by an average of 8.1% for household customers, Segment revenues were slightly above prior year level. EBITDA in the network segment was up by 3.6% and EBIT by 1.7%. With the beginning of the new calendar year, the Austrian regulator determined new network tariffs. Tariffs for electricity were increased By 66.3 percent on average and those for natural gas were increased by 6.4% on average as of the 1st January 2021. On the next slide, I will continue with the Southeast Europe segment.
Temperatures in Southeast Europe were lower than usual mild prior this Yes, but still higher than the long term average. In Bulgaria, we are facing stronger competition following the market liberalization And for commercial customers as of October 2020, based on these developments, we are reporting today an increase in network sales volume contrasted by a decline in electricity sales volumes. Segment EBITDA on EBIT remained stable at prior year level. They amounted to €33,600,000 respectively €15,500,000 I would like to conclude my presentation of the segments with the environment segment. In our international project business, we were awarded a new contract in Poland regarding The modernization of the wastewater treatment plant.
The project has a contract volume of about €11,000,000 In total, WDE Wassertechnik is currently working on 9 projects in Germany, Croatia, Lithuania, Poland, Romania, Bahrain and Kuwait. The order book was about €1,500,000,000 as of the end of December. In addition, our joint venture company Sludge to Energy It's currently working on 3 sewage sludge treatment projects in Germany. The financial performance of the segment is in line with the development in the international There was a corresponding rise of both revenue and operating expenses in this segment. All In all, the segment benefited from the start of the Kuwait wastewater project, which is accounted for according to the percentage of completion method.
In addition, there was a positive one off effect at our lower Austrian water supply company. In total, this development led to an increase in EBITDA to EUR 17,900,000 and EBIT to EUR 8,400,000 With this, I conclude the presentation of this segment. On the next slide, I will continue with the development of our group cash flows. Gross cash flow was substantially up €107,800,000 This was mainly due to the compensation payment for a takeover of the electricity procurement. A further factor was the higher balance of dividends from equity accounted industries.
The increase in cash flow from operating activities was lower in comparison, one reason were the higher income tax payments. Cash flow from investing activities was influenced chiefly by a year on year increase in investments in property, plant and equipment and higher investments in cash funds. The cash flow from the Pimposing activities reflected the scheduled repayment of loans. A contrary factor was the issuance of a clean private placement. The net change in cash and cash equivalents amounted to a minus €443,800,000 I would like to conclude my presentation with the confirmation of the outlook for the group.
Assuming average conditions in the energy business environment, We expect that the group net result in 2021 will be in a range of approximately €200,000,000 to €230,000,000 However, The further cause of the corona crisis into resulting macroeconomic effects could have a negative influence on individual business areas at the U. N. And in turn on the development of earnings for the entire group. I confirm our dividend policy is directed to holding the absolute amount Of the ordinary dividend, at least constant €0.49 per share so €0.49 per share. I'm now looking forward to answering your questions.
And the first question comes from Ludger Schumacher from Societe Generale. Over to you.
Good morning. Lueder here. A number of questions on my side. The first Few questions are on the transaction on the 150 megawatts of electricity procurement rise on 10.10. Seems to be that everybody else is trying to get out of coal exposure and you're adding to it.
I was wondering what the Thoughts behind it were and how exactly EVN will benefit from that transaction? You mentioned simplify the current contractual relationship in the tax. I still want to know how adding to coal exposure will benefit EVM? The second one also related to 2010 is apparently there's going to be a second compensation payment. When will this be paid?
And when it will be paid, how big is it? And would it also be immediately impaired as it appears to be that what happened with the first compensation payment? And then just for clarity, you mentioned there was an impact From this transaction in the Generation segment and the Energy segment, could you tell us exactly how much it is in each segment, so We can strip it out for the underlying trend. And the same also goes for the environment section. That's another question.
If you could quantify The impact from Q wide and also the positive one off on EVM and VASA.
Okay. Thanks a lot. I can confirm we try to look on the Valsam Power brand also Under the changed conditions of the stepping out of Germany out of thermal production Based on lignite and coal. Therefore, as a minority stakeholder in the company, we are on the other hand also Having this power supply contract and the Viennese municipality was a contextual partner in this. Therefore, we try to consolidate our position regarding the future of the Walsam power plant.
And we're expecting over the next years here clear guidance also from the market and evaluation of the power plant. The new law has been issued in August. The first auctions have taken place. This is what we are looking very closely at, But I'm not able to give you more information on that on this basis due to contractual obligations we are having there. You're completely right that the transaction itself is issuing of course question.
The second payment is already done, yes? So we are expecting not from this payment any further impairments. What we are, of course, facing is that the total volume it Sales in the future has always to be priced at the balance sheet days. So there's no further impairment Coming out of this deal. Everything has been already recognized in the figures.
You have this also in our notes. And I would recommend if you have a telephone call also So it's our Investment Relations guys to work with walk you through the different lines. I think it's much easier And to do this here in a bigger group. Regarding The COBRA questions which are also giving a contribution to the EBIT, It's a single digit contribution. We are at the beginning of this big project.
Luckily, All the issues in preparation could be solved in COVID already in advance. We used the period of the Pandemic for this, yes. Therefore, the ships with the pipes are already underway. The 3rd ship is loaded in the harbor. So I think, Yes.
With all the delays, we are still in the original time frame and also The customer is supporting us. So I think despite all the Pandemic issuance, we think we will manage this purchase quite well. And this will lead also to Step by step higher EBIT contribution from this project in the next couple of years.
Okay. Thank you. Just one follow-up question on your first answer. Is the idea that 10.10 will initially participate in 1 of the German coal closure tenders?
Honestly, everything has to be evaluated, yes? But we are in a minority stakeholder there, yes? So the lead is not with us, But all of us know the sensitivity of this issue. We have done our impairments with the year 2,033 regarding this contract. On this basis, it's between today and 2,033 When decisions have to be made, we will see from the environment how the stepping out of the nuclear Production in Germany with at the same time higher installed renewable energy capacities will lead Two questions regarding the power of supply in 2020, 23.
I think this will be the crossroad when the real Decisions will have to be taken.
Very clear. Thank you.
The next question comes from Theresa Schinwald from Rifeiizen Bank International. The floor is
yours. Thank you. Good morning. I also have a follow-up on the biosimilarsum issue. You mentioned the certain swing capacities on the balance sheet from the procurement rights.
We have seen a significant reduction in output from biosolum10, obviously, given its coal fired Production. So I wonder if this procurement rights valuation is already based This lower output level we have seen at Weizum in the past 2 years. This would be my first question. And the second one Is on the state of the game of the Renewables Expansion Act in Austria As the likelihood of a vote on this is now rather low in the Q1, could you Tell us a bit more about that, what's still open in negotiations and what could be a new time line? Thank you.
Okay. To the first question, of course, from now on, we have to put the whole volume of this power supply contract up To the valuations, yes, of course, power prices are the basis of everything also of the production of the power plant. But we tried to put everything what we gained now on the same levels. So we have this consistent position It's the end of December regarding our total procurement rates. The second thing is, of course, everyone is expecting this new act For the further support of renewable energy production, yes, is being sent to the parliament, voted on and put into The law.
The interesting thing is and this seems to be the complicated thing is they need a 2 third majority. So Government needs also the position in the parliament and it has to be accepted by the European Commission. Therefore, yes, there are 2 obstacles, yes, to put all the policy initiatives into a framework, which is then Accepted not only by the parliament with this majority, but also by the European Commission. Therefore, I think the negotiations and documentation in advance taking more time than they would have expected because it would be very embarrassing if they vote on a law and then The commission is not accepting this, yes? On the other hand, it's getting step by step a higher attention also in Austria.
So I still would confirm that I would think that before the summer, the law should be Voted and then after the approval by the commission, the formal approval by the commission should be effective. So I would expect This is the new basis for us for the further development in this year 2021.
Thank you very much.
At the moment, there are no further questions. And we have a follow-up question from Lueder Schumacher from Societe Generale. The floor is yours again.
Sorry, just one follow-up question. You mentioned there's good hydro flow. Can you quantify that? How much How good was the hydro flow in Q1 compared to normal?
Let me give it second. We are just looking on the comparison. Okay. Regarding the KPIs we are using for that, It's around 110,000,000 in comparison to the The average production. So this was quite nice.
Yes. We had a lot of snow also, yes. But it was interesting that the wind was so weak, yes? So let's see how this is on the midterm and long term influencing also the energy balance of our Activities and even of the state itself, this kind of climate effects, it's still something which is not having too much empiric Data for the past to compare them in relation. Also photovoltaic will be the 3rd input, which will be interesting then for us.
On volumes, but also regarding on the timing during the day and the season. Okay.
That's great. Thank you.
At the moment, there are no further questions. There are no further questions. And with this, I hand back to Mr. Shyskowitz.
Well, thank you for joining today's conference call. We will publish the results for the first half of our twenty twenty one financial year on Thursday,